Breaking News: CA's AG, Kamala Harris, Says 'No Deal'. Refuses to Bow Down to the Banksters.

This can be good for the Banks!

According to Barrons.....

Quote:

California has pulled out of negotiations with banks to come to a settlement over robo-signing and other foreclosure practices, possibly derailing attempts by banks and the Obama administration to come to a deal worth about $25 billion to the states. California AG Kamala Harris called the proposed deal "inadequate for California homeowners."

The news could hit big banks hard, as the longer they take to dispose of large potential liabilities, the more investors have questioned value of their stocks.

According to Forbes.......

Quote:

In a letter sent Friday to Associate U.S. Attorney General Thomas Perrelli and Iowa Attorney General Tom Miller, who have been leading the negotiations, Ms. Harris said her decision to break off from the group was driven by two key concerns. "It became clear to me that California was being asked for a broader release of claims than we can accept and to excuse conduct that has not been adequately investigated," she said.
Harris's decision to break from the probe comes somewhat as a surprise since it was her counterpart in New York, Eric Schneiderman, whose been making threats to break from any agreement that didn’t allow him to pursue claims against banks on his own.

http://www.dailykos.com/story/2011/09/30....

Quote:

the longer they take to dispose of large potential liabilities, the more investors have questioned value of their stocks.

Speaking of which; This is totally anecdotal but I have no reason to doubt it:

Some friends of ours have a vacant house next to them. The neighbors walked away. When they offered the bank the keys, the bank refused to take them and told them to just "hold onto them, we'll call when we are ready for them". They said the bank had inventory 3 years old and they were too backed up to take any more keys. When I asked why they weren't living there anymore, they said the air conditioner broke down during the heat wave so the father of one of the owners rented a house for them.

These are fairly nice houses, probably sold at the top somewhere around $200,000. Not McMansions but nice enough.

Just wondering how much longer banks can sit on these houses? No one is taking care of the house except the neighbors cut the grass in the front. I know others who have taken care of vacant houses in their neighborhood, just to try to keep their own property values from dropping further.

It seems like it would have cost less to fix/replace the AC than move and pay rent on another home. They could have been saving some money for renting another place themselves. I don't know, it doesn't make any sense to me. And now, somebody could be living there, taking care of it, and generating some rental income, even if a bargain rate is necessary because there happens to be a glut of rentals available in the local market. But three years...... That's a whole lot of rent to pass up for no reason. The bank doesn't get paid a dime more either way.